A vehicle carrying two gas canisters, two handguns and one Kalashnikov collided with a police car near the Champs-Elysées in Paris around 3:40 p.m. local time today, and the incident is being investigated as an act of terror, the Paris prosecutor's office confirmed to ABC News.

The 31-year-old driver of the white Renault Mégane set his car on fire before hitting a police vehicle, with the hopes of creating an explosive impact, said French officials.

Police did not fire a single shot at the scene, but officials confirmed that the driver, who had been flagged for extremism, was badly burned and died. No injuries were reported in the incident as the explosion was limited to the inside of the driver's vehicle, police said.

Police quickly declared the situation "under control" and a bomb squad responded to the scene after explosives and a gun were found inside the driver's vehicle.

Andrew Cawley, a witness to the incident, wrote on Facebook that he saw smoke coming from a white car, following a series of loud noises.

"We were sleeping in the park around 20 [meters] away from the incident," Cawley wrote. "There was a very loud bang followed by 3 'popping' sounds (like gun shots) then silence."

Gérard Collomb, France's interior minister, did not hesitate to call the attack an attempt to commit terrorism.

"Once again, French police were targeted with this attempted terror attack on the Champs-Elysées," Collomb said, while adding that the attacker's motives weren't immediately clear.